November 9, 2009 1:51 PM
The new Central Library has one more hurdle to clear. It's a budget amendment that, in the name of protecting taxpayers, would actually cost them more.
The amendment would hold up construction of the new library until New Markets Tax Credits could be secured and $4 million was raised from private sources. I don't have any problem with the tax credit condition. We would do that anyway. But the fundraising trigger is a big problem that would add to the price.
It's likely that securing $4 million in donations would take a year or more. By that time, construction costs will almost surely be much higher than they will be next year. We're currently getting some of the best construction bids in recent memory, but that won't last as our economy starts to recover. In addition, we're counting on an extraordinarily low interest rate by using the American Recovery Act Bonds that were part of the Federal stimulus package. Once again, it's unlikely those bonds will still be available by the time this fundraising threshold is reached.
My budget would pay for the library over three years. It anticipates $5 million in private fundraising in 2011 and another $5 million in 2012. I discussed that with the Madison Library Foundation before I introduced my budget, and they say it can be done. Of course, they'll get started right away, but expecting to hit the first $5 million by 2011 is reasonable. Expecting that in 2010 isn't.
All told, we'll be getting a $37 million building for $17 million in taxpayer supported borrowing. The rest will come from the tax credits, private philanthropy and $4 million from the sale of the existing building. It's a solid plan that takes advantage of today's low construction costs and interest rates. And it puts people to work now, when they need the jobs the most.
The capital budget is likely to be voted on Tuesday night. I hope the Council will vote down this amendment so that we can take advantage of historically low prices and interest rates. It's the best thing for both our taxpayers and our construction workers.